Lecture 9: “Chapter 8:

Invention: Accelerating returns after 1800”

CCGL9042: Evolution of Civilization

Dr. Larry Baum & Dr. Jack Tsao
Song 1 Song 2
 Main points of this
lecture
• Economic growth boomed after ~1800.
Why?
– Land?
– Capital?
– Work Ethic?
– Intellectual property?
– Science?
– Government?
– Exchange?
• Why then (and not earlier)?
 Summary of Connections
• Networks cause innovation.
• Thus each innovation Radio Video

originates from multiple

events, ideas, and factors. Electron
TV Color TV
gun
• In turn, each innovation
leads to multiple further Photography Connections
innovations.
• Communication accelerates
innovation.
 Summary of Connections
• Factors that spark innovations (RAWSLED)
– Religion
– Accident
– War
– Surprise use of one thing in another field
– Looking for one thing and ending up with another
– Environment
– Deliberate search
 “Innovation is like a bush fire”
• Ridley: Each innovation heats up quickly, then cools, like punctuated
equilibrium of evolution.
– 50,000 years ago, ovens, bows & arrows in west Asia
– 10,000 years ago, farming & pottery in Fertile Crescent
– 5000 years ago, metal & cities in Mesopotamia
– 2000 years ago, textiles & concept of zero in India
– 1000 years ago, porcelain and printing in China
– 500 years ago, double-entry bookkeeping in Italy
– 400 years ago, Amsterdam Exchange Bank
– 300 years ago, Canal du Midi in France
– 200 years ago, steam power in England
– 100 years ago, fertilizer in Germany
– 75 years ago, assembly line in USA
– 50 years ago, credit card in California
– 25 years ago, Walkman in Japan
 Why did
economy boom?

Let’s look at possible factors:

 Land?
• Land area is constant.
• But farmed land did rise
(~3x after ~1800).
– Transportation cut cost to
reach remote land.
– Technology made marginal
land profitable.
• Thus land contributed
somewhat.
 Currency?
• Invention of money to easily exchange
goods and services.
• Money in ancient times was just metal,
not yet currency, a meme of trust.
• Currency spread all around the world
(Roman empire, India, Arabia, China)
• Currency gradually became the most
universal and efficient system of mutual
trust devised.
• Today, >90% of all money exists on
computers.
• Currency provides capital for investment.
 Capital?
• Most capital not invested for innovation
• Most growth from innovation, not from
capital
• But capital helps make a new innovation
available to everyone.
• Example: Facebook
– Not much capital needed to start:
• a few $1000 to get website going
• $500K from Peter Thiel (PayPal founder)
– But then tens of millions of $ to grow,
from:
• Venture capital firms
• Microsoft
• Li Ka Shing
 Work Ethic?
• Sociologist Max Weber argued that
values of self-discipline, rationality, and
hard work of the ‘spirit’ of capitalist
societies originated from the religious
Protestant work ethic (reward for hard
work and worldly duties).
• Secularisation during the Industrial
Revolution reduced the influence of
religion. However the work ethic
persisted and has been essential for the
proliferation of capitalism.

Max Weber’s The Protestant Ethic and the Spirit of Capitalism (1904- 05)
 Intellectual property?
• To stimulate invention, governments grant
inventors monopolies.
• Spread from Italy in 1400s.
• Patents, trademarks, and copyrights
• Probably not key to encouraging innovation.
– Often not rewarding
– Reward often from other methods
• Trade secrets (Coca Cola)
• New ways to cut costs (Wal-Mart, Dell)
• Brands (Rolex, Chanel)
• Frequent new editions (Apple, Microsoft)

From Clark (2007), A Farewell to Alms

Innovation in textiles
• Invention continues now.
• Amazon may profit, but
competitors are likely.
• Labor cost will decrease.
• Consumers may benefit
with cheaper clothes,
better fitted to them (in
both senses!).
Shortly before Christmas, with sales of hoverboards surging
as the must-have gadget of 2015, Shane Chen flew to China
to confront his tormentors.
Chen is the man who developed and patented the
hoverboard design in his lab on the US west coast four years
ago. With its two wheels, the “hoverboard” doesn’t quite
match up to the promise of its namesake in Back to the
Future – but that has not put a dent in its popularity.
Hundreds of thousands of hoverboards have been flying off
shelves; celebrities have posted videos of themselves riding
– and falling – off them. Even a Filipino priest got in on the
act – and was promptly suspended for riding one during
Christmas Eve mass.
Someone was making lots of money, but it wasn’t Chen. He
marketed his design under the brand name Hovertrax, which
sold for about US$1,000. Cheap imitations, made in Chinese
factories, have flooded the market at about one quarter of
the cost.
“We only made maybe a few thousand,” Chen said. “I got a
report that there are over 11,000 factories making them in
China. They made more than a million.”
In December, Chen went to China to see for himself. “I
visited some of the knock-off factories. They actually
thanked me for having the imagination to invent it. They
understand they’ve infringed my patent but they know
there’s nothing I can do,” he said.
So he hasn’t gotten rich off his invention? “No, no,” he
sighed. “If you look at history, inventors are usually poor.
Other people make money. By the time we did the
Hovertrax I was kind of used to it because there are about
six of my inventions that have been copied over the past 10
years.”
https://www.theguardian.com/technology/2016/jan/08/hov
erboard-inventor-money-rights-knockoffs
(0:51)
 Patents help or hurt
innovation?
• Help
– To develop a new drug costs several billion US$.
– Without patent protection, few new drugs would be
developed.
• Hurt
– Patent trolls buy many very broad patents just to sue
and scare companies into paying them royalties.
– Adds cost to innovation
 Countries
that lead in
innovation
 Patent centers

• Orange dots:
top 100 patent
sites
• 59% of all
patents
• 2011-5 http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017-chapter12.pdf
Regional patent centers

http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017-chapter12.pdf
Regional patent centers

http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017-chapter12.pdf
Regional patent centers

http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017-chapter12.pdf
Local patent centers

http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2017-chapter12.pdf
 Science?
• Did basic science research drive innovation?
– Sometimes yes
– Sometimes the reverse
• Scientists tried to explain how innovations work.
• Wealth from innovation funded science via taxation.
• Applied research?
– US companies spend ~2% of GDP on research &
development.
– Profit from R&D creations is low partly since large
companies risk averse and so often ignore
opportunities.
– To solve this problem, try autonomy.
 Science?

• Autonomy for drug development

– Big drug companies can’t find as many drugs as before.
– So they’ve started partnering with small companies to discover drugs .
http://www.nature.com/nrd/journal/v11/n3/fig_tab/nrd3681_F1.html
 Government?
• Governments created big • Companies then
programs: commercialized them.
– Space exploration – Space exploration
– • SpaceX
Large Hadron Collider
• Blue Origin
– Nuclear weapons
– Internet
– Internet • Uh, a few examples…
– GPS – GPS
– Human Genome Project • Every cell phone company
• But most innovations have
come from the private sector.
 Government?
• The Human Genome Project
– With follow-up projects, cost US
government ~US$15 billion.
– Would the genome have been sequenced
without government help?
– Craig Venter founded Celera Genomics and
sequenced the human genome using
private funds.
– Celera and HGP finished at the same time.
Government?

Nature Materials 10, 407 (2011) doi:10.1038/nmat3044

 Exchange
• Innovation generally results from a
mating of ideas.
• Rising ease of exchange of ideas has
sped innovation.
 Accelerating change
• In general, innovation has been
accelerating.
• But what about for specific things?
– Has innovation been accelerating?
– If so, will acceleration continue?
• Look at examples
 Accelerating change
• Number of scientific papers
– >4 million/yr
– Doubles: ~12 years
• Number of authors
– ~10 million/yr
– Doubles: ~11 years
– Let’s take a quiz
– By 2125, would equal Earth’s
population!

https://blog.acolyer.org/2017/10/06/a-century-of-science-globalization-of-scientific-collaborations-citations-and-innovations/
 Accelerating change
• Number of scientific papers
– >4 million/yr
– Doubles: ~12 years
• Number of authors
– ~10 million/yr
– Doubles: ~11 years
– Let’s take a quiz
– https://play.kahoot.it/v2/?quizId=9a4de05
1-a877-4a81-b3dc-8134c51d5404
– By 2125, would equal Earth’s
population!
https://blog.acolyer.org/2017/10/06/a-century-of-science-globalization-of-scientific-collaborations-citations-and-innovations/
 Accelerating change
• Sales of electric cars
in world
– > 1.4 million/yr
– Doubles: ~18 months
– By 2037, everyone on
Earth would buy an
electric car each year!

http://www.ev-volumes.com/country/total-world-plug-in-vehicle-volumes/
 Accelerating change
• Number of virtual
reality users
worldwide
– ~170 million
– Doubling in ~1 yr
– In 6 years,
everyone would
use VR!
 Acceleration can’t continue
• For those examples, there are limits.
• Doubling can’t go on.
• May slow to
– linear increase.
– no increase (S-curve).
– decrease.
 Slowing to a linear increase
• Human population
• Cars in the world

http://www.roperld.com/science/ElectricCarsTotal.htm
 No increase (S-curve)
• Stop increasing
 At 100%: switch from one state to another, or
 <100%: plateau at new level
 Switch from one state to another
• Photos show example: New York
– Top is 1900. Where’s the car?
– Bottom is 1913. Where’s the horse?
NY Cars (% of vehicles, hypothetical) Car vs. Horse US Market (% of vehicles)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

https://www.bbc.com/news/business-45786690?SThisFB&fbclid=IwAR2UkpwyIJI2_ YW2O0_3foyTCmVb0AolQ5pDxmco55oqq-ay-6kmYaS_dTs
1905 1915 1925 https://www.rethinkx.com/ Rethinking Humanity book, p. 16
 Switch from one state to another
• Smartphones: US market share
– 3% in 2007
– 81% in 2016

https://www.rethinkx.com/ Rethinking Humanity book, p. 12

 Leveling off to cruising altitude
• Airplane speed
• Airplane design
• Physical limits: sonic boom
• Economic limits: Concorde
http://www.ipcc.ch/ipccreports/sres/aviation/index.php?idp=92

https://www.thisdayinaviation.com/2-1925/
https://commons.wikimedia.org/wiki/File:Lufthansa_Boeing_747-8_(16278574162).jpg

1925 1970 2015

Leveling off
• Wine in UK steady
• Beer in UK fell

http://www.historyandpolicy.org/opinion-articles/articles/the-highs-and-lows-of-drinking-in-britain
 Anti-change
• Many, many possible examples.
• Example: teachers too lazy to update material
• Example: cello design
– Same for centuries
– Not optimized. Example: tightening strings
• String wound on peg to fix length and thus tone.
• Peg fixed only by being shoved in hole.
• Peg often loosens, needing much time to readjust.
• Why not improve?
– Ratchet
– Velcro
– Piezoelectric crystal, adjusted automatically by an app
connected to a tuning app!
• Because of https://www.youtube.com/watch?v=gRdfX7ut8gw (0:00-1:45)
• Thus, sometimes we reject change.
 Anti-change
• Machine breakers
– Luddites: named for Ned Ludd,
who broke 2 knitting frames in
1779 in UK
– Skilled workers broke textile
machines to protest loss of
their jobs.
– https://www.youtube.com/watch?
v=QgYFGIBWIfw
(2:38)
– Thus, another factor slowing
innovation is job protection.
 Rise and fall

https://www.washingtonpost.com/news/arts-and-entertainment/wp/2013/04/11/vinyl-records-are-more-popular-now-than-they-were-in-the-late-90s/?utm_term=.332815bda8ac
 Rise and fall
• Rise and fall happens when new things appear in succession.
• Rise and fall also happens when new things grab public attention.
– Fads and fashions: We’re social animals, so we follow the crowd
– Movements: See that critical mass might change the status quo
– Bubbles: Speculation
 Hype cycle
• Overexcitement about
innovations
1. Innovation occurs
2. Excitement builds
3. Expectations too high
4. Criticism builds
5. Expectations too low
6. Public forgets about the
innovation, but it slowly
improves
7. High expectations may
eventually be met, but later
• Only happens sometimes
• Can you name examples?
• Tulip mania: Holland, 1637 Bubbles
• South Sea Company: UK, 1720
– The stock value rose, thus many people rushed to buy stock in it and other companies.
– One new company claimed its purpose was "for carrying out an undertaking of great
advantage, but nobody to know what it is"!
• Brazilian stock market: 1889-93
• Florida land: US, 1925
• Japan asset prices: 1986-1991
• Beanie Babies: US, 1995-9
• Hong Kong real estate: 1996-8
• Cryptocurrency: 2017-8

http://www1.centadata.com/cci/cci_e.htm
 Are there always limits?
• Moore’s Law: transistors
on a chip double every
two years.
• https://www.intel.com/content/
www/us/en/silicon-innovations/
moores-law-technology.html
(2:03)
• Lasted about 4 decades
• Now may be slowing. In
2015, Moore said: "I see
Moore's law dying here in
the next decade or so.“
 Are there always limits?
• But wait. Using another
measure, Moore’s Law
has lasted even longer.
• Reasonable to expect it
to continue at least a
while
• How?
– Continual improvement
– Switch to new method
– No physical limits yet

https://commons.wikimedia.org/wiki/File:Moore%27s_Law_over_120_Years.png
 Is the principle behind Moore’s Law
unique to chips?
• Surprisingly, no!
More
• Many technologies decrease cost production
exponentially over time.
• Why? Manufacturing experience
leads to…
– better tools to make goods better, faster, Improved
More demand
& cheaper. efficiency
– better methods to make goods better,
faster, & cheaper.
• Wright’s law
– Cost falls with cumulative production. Cheaper
– Usually follows Moore’s law, but a bit production
more accurate.
 Wright’s law dilemmas
• Choice vs. Concentration
– Making a wide variety of things gives consumers more choice but reduces
economies of scale.
– Concentrating on a few things lowers price but gives consumers less choice.
• Big vs. Many (whale vs. krill)
– Large products more efficient,
but few, so little learning.
– Making a huge number of a
product lowers cost.
• Research vs. wRight now
– Research can find better things,
but it delays production.
– Settling on one thing to mass
produce lowers its price but
locks out breakthroughs.
 Artificial intelligence
• Computer hardware accelerating
• Artificial intelligence increasing
– AlphaGo
– GPT-3 https://www.youtube.com/watch?v=ugfG8PTfiDE (0-2:20)
• Singularity
– When AI can improve itself.
– When?
– https://www.youtube.com/watch?v=gpKNAHz0zH8 (2:55)
 Why has change increased?
• Ever since memes began changing, innovation has been
accelerating. Why?
– Trade
– Exchange of information
• Since the Industrial Revolution, innovation greatly accelerated.
Why?
– Producer explosion
– Consumer explosion
– Communication explosion
– Tools
 Producer explosion
• Time spent producing
(non-food) has exploded.
– At work
– At home
• How does that help
innovation?
– Time for invention
– Resources for invention
• Money
• Facilities
• Network

https://commons.wikimedia.org/wiki/File:Fredmeyer_edit_1.jpg
 Producer explosion
• At work: growth of companies https://commons.wikimedia.org/wiki/File:Good_Smile_Company_Offices_(12).jpg

– More employees
– More variety of companies
• At home: growth of leisure
– From a few aristocrats and royal
scientists to billions of middle
class entrepreneurs and hobbyists
– Pursuing their passions to use and
improve

https://epsnews.com/2015/06/02/electronics-hobbyists-fuel-economy/
 Producer explosion
US Agricultural vs. Non-Agricultural Labor
• MANY more
people in non-
agriculture work
– More people
– Fraction in non-
agriculture sector
rose
– Product of above
https://motherboard.vice.com/en_us/article/pgggbn/we-were-once-a-nation-of-farmers-now-rise-up-robots-and-harvest-our-food

two factors is MUCH

bigger (~16x in US
chart)
Hong Kong? Your great-grandparents & you
https://ourworldindata.org/employment-in-agriculture#absolute-size-and-share-of-the-agricultural-labor-force-in-england-the-netherlands-and-france-1500-2000-simon-1996ref
 Consumer
explosion
• Consumer market has
grown tremendously.
• How do consumers help
innovation?
– Deeper market: more money,
to buy more of each invention
– Wider market: more people,
to buy more variety of
inventions
 Consumer explosion
• MANY more people with time
and money
– More people (~7x in graph)
– Non-poor fraction much higher
(~15x)
– Product of above two factors is
MUCH bigger (~100x)
– Rise of the non-poor
 Consumer explosion
Middle class growing
• Middle class (US$11-
$110/day) spending may
double over 2 decades.
• Fastest growth in middle
class is this generation.
• Rule of 7 (a few years ago)
– ~1/7 made <US$700/yr
– ~1/7 made >US$7000/yr

https://www.brookings.edu/wp-content/uploads/2017/02/global_20170228_global-middle-class.pdf
 Romantic Consumerism

• Romanticism – a movement emphasising

individualism, having many different
experiences, and opening ourselves to a
spectrum of emotions.
• Romanticism married with the ideas of
consumerism to create the fictional reality
that individuals should aspire to an infinite
‘market’ of experiences (relationships, music,
cuisines, holidays, hobbies, careers, etc.)

References: Chapter 6: Building Pyramids of Harari YN, 2015, Sapiens: a brief

history of humankind
The Romantic Ethic and the Spirit of Modern Consumerism (1987) by Campbell C.
 Romantic Consumerism
• Led to the development of consumer
cultures originating in USA and Western
Europe
• For example, the modern popular desire
to spend money travelling abroad for
holidays is not an obvious or natural idea.
• Gradual withering of intimate
communities, leaving imagined
communities to fill the emotional vacuum.
• Nations eclipsed by consumer tribes (For
examples: fans of Beyonce, Apple, Star
Wars, Pokémon, Manchester United)

https://medium.com/swlh/coming-to-america-my-first-100-days-in-new-york-a851a9dfda0b
 Communication explosion
• How does communication help innovation?
– Solo: inventors can access information.
– Horizontal collaboration: inventor-to-inventor
– Vertical collaboration: user to maker
• How did communication improve? Faster, cheaper w/each step:
– Past: in person or by mail with one person; months to cross world
– Late 1800s: telegraph; days to cross world
– 1900s: telephone; instant
– 2000s: internet; with many people, more detail; from snail mail to e-mail for
documents
Speed of information travel

From Clark (2007), A Farewell to Alms

 Increases in connectivity

From Clark (2007), A Farewell to Alms

Total of ~800 megameters (thousand km) by 1910

Cities ~a megameter away: Manila, Hangzhou, Wuhan, Chongqing, Da Nang
 Tools
• How do tools help
innovation? They’re
levers to amplify
labor, time, money.
• Why did tools
increase? They
accumulate.
 Why has change
increased?
• Biggest factor in innovation
acceleration:
– Producer explosion?
– Consumer explosion?
– Communication explosion?
– Tools?
• Producer and consumer
biggest
– Do they share a common cause?
– Demographic transition
 Why has change increased?
• Aren’t other factors just as important?
– Communication
• Speed not vital for all things
• Innovation in person (solo or group) not helped
– Tools
• Yes, they’re important,
• but each was not much more so after than before Industrial Revolution.
– Life expectancy rise
• Yes, this raised years of life of consumers and creators,
• but ~3X, not 100X.
 Future rate of change
• What does this imply for
future rate of innovation? Cumulative innovations?
– If demographic transition is main
driver of acceleration,
– and demographic transition will
finish,
– then acceleration may stop.
– (not that invention will stop, or
even slow, but that rate of
invention won’t rise)

1900 1950 2000 2050 2100

 Future rate of
change
• Problems of this prediction
• Just an average. Areas of innovation
slow or speed independently.
– Artificial intelligence
– Violin design
• Other factors important?
– Tools: AI, medicine?
– Second demographic transition?
• After everyone middle class, will
growth re-accelerate?
• Just speculation
Future rate of change
• Bad or good if innovation constant?
– Less improvement in quality of life than
if acceleration continues
– But plenty of improvement, and things
will already be good
• Almost everyone may be middle class
• Material basics for happiness
• Similar to worry about slow growth of
Japanese economy
 Future rate of
change
Another way to predict

• Drake equation:
https://www.youtube.com/watc
h?v=JguxPh6UHFc
(0:25)
• Fermi paradox:
https://www.youtube.com/watc
h?v=sNhhvQGsMEc
(6:21)
• Maybe we’ll destroy ourselves.
The End?